Target-Date Funds Making Retirement Planning Easier

By McCallen, Joan | Public Management, March 2011 | Go to article overview

Target-Date Funds Making Retirement Planning Easier


McCallen, Joan, Public Management


With so many options in the marketplace, selecting the combination of mutual funds that will best meet individual goals can prove challenging for many investors. For those retirement plan investors who are looking for a straightforward way to invest, target-date funds continue to be a popular option.

[ILLUSTRATION OMITTED]

Target-date funds, also known as life-cycle funds, provide an all-in-one strategy that simplifies investing by incorporating automatic aging and rebalancing into the design. Investors simply pick a fund with a target date closest to the year in which they want to retire or to begin withdrawals. The investment portfolio and associated risks are aligned with that specific target date.

Over time, target-date funds age to reflect an increasingly conservative asset mix (that is, an increased amount of the fund's assets are moved from equity to fixed-income funds) as the target date draws near. Rebalancing--maintaining a target balance between equity and fixed-income funds--helps the fund's allocations to remain on track.

Many retirement plan providers, including ICMA-RC, offer a wide range of target-date funds. For investors in or near retirement, funds that are typically more conservative, such as one focused on preserving retirement income or one with a target withdrawal date as early as 2010 are available. Investors with longer retirement time frames or distribution dates have a selection of funds going out to 2045 and sometimes even further.

Our experience tells us that public employees regard target-date funds as an attractive investment option. Our target-date funds have been well received by plan sponsors, and most plan sponsors have selected them as their qualified default investment alternative (QDIA). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Target-Date Funds Making Retirement Planning Easier
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.